#14 - JRL 7173
Los Angeles Times
May 8, 2003 Thursday
A Film Rights Dispute Beyond the Iron Curtain
By Michael Hiltzik
It's not often that an American judge will dress up a published opinion with an aphorism attributed to Joseph Stalin.
But U.S. District Judge David G. Trager apparently could not resist the temptation upon ruling, in mid-2001, on a case that involved byzantine claims and counterclaims over the global distribution rights to a huge package of priceless Soviet-era animated films. As he quoted the old Kremlin leader: "Facts are obstinate things."
Yet as Stalin must also have known, bureaucracy and the impulse to profit from someone else's labor are obstinate things too.
Indeed, Trager's ruling hasn't relieved the victorious plaintiff in that case, a San Fernando Valley company called Films by Jove, from having to keep fighting off video pirates, Russian officials and assorted hangers-on who contend to this day that the firm's distribution rights are invalid.
"We'd be in the black if we didn't have to spend so much time and money on legal battles," Joan Borsten Vidov, Jove's president, told me not long ago in the living room of her Studio City home and office. "We've had deals canceled because of the cloud" caused by all the lingering legal issues.
From the opposite sofa, her husband and business partner, Oleg Vidov, snorted angrily.
"It's Russia," he said. "Russians never learn from their mistakes. So they continue to do the same mistakes again."
Their argument is that the continuing murk over property rights and legal process in the new Russia is scaring off much-needed investment -- and they cite their own experience as an object lesson.
The Vidovs have spent $4 million since 1992 -- much of it from outside investors -- to clean up the neglected library of animated films in question and market them to the West, paying license fees and a portion of any profits to the original Moscow studio.
Now that the films are seen to have real value, they say, the Russian government wants to abrogate the original contract and turn the marketing over to a company run by a U.S.-based Russian -- a man who has pleaded guilty in federal court to charges related to video piracy.
The dispute has produced contradictory court rulings in Russia, France and the United States, and no doubt more are in store. As Trager noted in another ruling in the case last month, "The complexities of the dispute defy concise description."
But let's try.
Films by Jove's venture in Russian animation was born of Oleg Vidov's conviction that a broader distribution of the films he cherished in his youth could create a cultural bridge between Russians and Americans. A prominent film actor in the Soviet Union, Vidov defected in 1985, reaching the United States via Yugoslavia, Austria and Italy. (He can be seen, beneath layers of makeup and a false nose, as the Soviet U.N. ambassador in the 2000 Cuban missile crisis movie "Thirteen Days.")
Returning home in 1991, he stopped by the Moscow headquarters of Soyuzmultfilm Studio. The Soviets had founded the animation house in 1936 on the confiscated premises of a Russian Orthodox church as an answer of sorts to Walt Disney Co.
At the time Oleg Vidov arrived, the studio aspired to show its work to the world -- but also recognized that its films were in deplorable condition. The Vidovs eventually secured all distribution rights to the Soyuzmultfilm catalog outside the former Soviet Union on the understanding that they would pay for the films' restoration.
The job proved unexpectedly involved. Not only did the films have to be digitally restored, but it seemed that the Soviets had honored international copyright law chiefly in the breach, freely appropriating literary source material and music from all over the world.
The Vidovs were forced to negotiate with rights holders including Rudyard Kipling's heirs, the Gershwin estate and the producers of "The Godfather," the love theme of which was featured on the soundtrack of a 1978 short about the blooming relationship between an artist and a space alien.
The Vidovs also had to create a market for material that confounded modern tastes. These are not cartoons that can be watched with one eye, like the crude stuff American TV stations air Saturday mornings as children's sedatives. Nor do they have the lacquered impersonality of computer-generated stuff in the "Toy Story" vein. Rather, they're charming and wry, tell their stories largely through music and image, and almost invariably display a quality of personal artisanship that has all but disappeared from modern animation.
The crown jewel is the work of Yuri Norstein, a legendary animator whose entire completed output, much of it in his distinctive style of hand-drawn paper cutouts, amounts to scarcely 90 minutes on film, including the 28 minutes of "Tale of Tales," a little-seen masterpiece that was named the best animated film ever made in a 1984 survey of industry professionals. It seems to retell the entire baleful postwar history of the Soviet people in imagery as spare and evocative as a line of Pushkin's verse.
At first, the Vidovs had trouble finding financial partners. "Hollywood," Borsten Vidov recalls, "is more interested in Pokemon," which is to real animation what Muzak is to Mozart.
The breakthrough occurred when they hooked up with Mikhail Baryshnikov on a project to re-dub a series of animated folk tales and fairy tales with the voices of American, French and Spanish stars for distribution in their respective lands.
Released in 1996 as "Mikhail Baryshnikov's Stories From My Childhood," the package "changed the whole profile of Russian animation," Borsten Vidov says. A series of classic shorts aired on PBS, the Bravo channel and elsewhere, and the Vidovs began to see the films as evergreens that could be remarketed every few years to a new wave of young viewers.
Soon after that, however, questions arose about their rights. In the legal chaos of post-Soviet privatization, Soyuzmultfilm had morphed from a state enterprise into a sort of leasing company and finally into a private firm. When the Vidovs contracted with the company, they assumed that as successor to the state enterprise it was the owner of the copyrights to the films. But in 1999, the Russian government created a new company and claimed that it -- not the Vidovs' partner -- was the true legal successor to the original studio. The government wanted the film rights back.
The two Russian companies fought it out in Russian commercial court, a process that generated seven mutually incompatible (and sometimes self-contradictory) rulings.
Finally, a supervisory court produced a ruling in December 2001 that, at least by implication, nullified Jove's legal rights to the films.
Thus far, Judge Trager has chosen to ignore that court's findings, on the suspicion that undue official pressure provoked the Russian judges to lean in the government's favor. As recently as last month, the Brooklyn, N.Y.-based judge upheld the Vidovs' claims.
It should be said that in striking a deal with a Russian enterprise in the first half of the '90s, the Vidovs were wading into a crocodile tank, and the beasts are still thrashing.
The problem was that the privatization campaign, which aimed to transfer the vast holdings of the Soviet state into private hands, was undertaken so hurriedly and haphazardly that the legal confusion has never cleared.
"You're right in the middle of possibly the least-organized area in all Russian law," says Sarah Reynolds, a private consultant on the law of the former Soviet states.
Naturally, fights over these claims become nastier as the assets acquire value.
"In a country like Russia, where there's a lot of stuff that's valuable and no clear understanding of who owns what, there's an incentive to keep uncertain who owns what as long as there's a lot of stuff that can be easily stolen," says Paul B. Stephan, a University of Virginia international law professor and an expert witness for the Vidovs.
"Joan took every precaution she could," Stephan added, "but she was vulnerable to people coming back and saying she didn't dot all her I's and cross all her Ts."
Somewhat the same argument is made by Robert Clarida, a New York copyright lawyer who represents the newly established Russian film company in its effort to place the copyright back under state control.
The Vidovs "made a deal with somebody and they took a commercial risk," he says, suggesting that they were themselves trying to exploit the confusion by thinking, in his words: "We can get a fire-sale price on these rights because uncertainty makes them so cheap."
The Vidovs say they'd be willing to discuss a deal to relinquish their claim -- but only if they can recoup their investment. Clarida doesn't sound enthusiastic about the idea.
But Reynolds believes that might be the best way to resolve an issue that remains so thoroughly snarled.
"I don't envy the judges sitting and listening to these things," she says. "Some of these cases are just gosh awful, and there just aren't good legal answers."